New beer bill pits Texas wholesaler groups against each other

Another bill that would affect the state’s beer industry was filed this week in the Texas Senate.

This one pits one of the state’s two biggest distributor groups against the other.

You can read the bill, SB 639, here. You may recall that the man listed as the bill’s author, state Sen. John Carona, R-Dallas, was among the co-signers of the the package of legislation filed last week on behalf of craft brewers and brewpubs and endorsed by the Texas Craft Brewers Guild. But Carona’s name has since been removed from those bills. (A growing number of other Senate co-signers have been added, however. *)

I called Carona’s office and was referred to the director of the Senate Committee on Business and Commerce, which Carona chairs, for comment on the newest bill. I haven’t heard back.

But I did reach several craft brewers as well as representatives of the distributors: Rick Donley of the Beer Alliance of Texas and attorney Keith Strama of the Wholesale Beer Distributors of Texas. They have startlingly different takes on the legislation.

Texas brewers would lose a potential source of capital and some flexibility in negotiating sales under a bill being considered by the state Senate.

The Texas Craft Brewers Guild immediately opposed the legislation, as did one of the state’s two major groups representing wholesale distributors — which called it “asinine” and “anti-competitive.”

The bill, authored by state Sen. John Carona, R-Dallas, chairman of the Senate Business and Commerce Committee, would prohibit brewery owners from selling distribution rights for their beer and it would restrict them from selling beer at different prices in different geographic areas.

Scott Metzger, owner of Freetail Brewing Co. in San Antonio, has been actively involved in talks regarding a separate package of bills designed to help the state’s growing number of independently owned craft breweries and brewpubs.

He said the major provisions of the Carona bill were not raised during pre-session negotiations among lawmakers and industry stakeholders and he said the Craft Brewers Guild opposes all of them, whether in this bill or if they should be added later to other legislation.

Supporting the bill is the Wholesale Beer Distributors of Texas, which represents the majority of distributors that by law have exclusive rights to sell beer from breweries to retailers. Attorney Keith Strama characterized the provisions as housekeeping that would clarify what already is not allowed by the state’s alcoholic beverage code.

Strama said, for example, the code does not explicitly authorize selling distribution rights and so it really should not be legal. He cited “confusion in the marketplace.”

But Rick Donley, president of the Beer Alliance of Texas, which represents Silver Eagle Distributing and other major wholesalers that collectively handle more beer volume in the state, said the bill would do “great harm” to the ability of craft brewers to grow and get their products to market.

“It’s probably the most anti-competitive piece of legislation I’ve ever seen,” Donley said. Change the topic from beer to hydrocarbons or other consumer goods, he said, and the proponents would “be laughed out of the Capitol.”